Real Estate Investing: Not how I planned it, but I’m a real estate investor I think... |
- Not how I planned it, but I’m a real estate investor I think...
- Rental property vs Mutual Funds
- Growth Strategy Help?
- Confused on how to execute strategy..
- Median income?
- Did I include the numbers correctly? Thanks.
- Primary Residence to Rental Property Strategy
- looking for good book to read
- How can I assess my potential cash flow on this duplex?
- Flipping Legal Question
- Buying property partly with self-managed IRA
- New investor pulse checks
- Early Withdrawal 401K
- How long does it take you on average to 'find' your next deal?
- Home equity line LTV rates
- Capital gains tax on accumulated depreciation
- $400k Rental Property - $3k-$3.2 Rent - Worth it?? Or Pass?
- Change in Owner-Occupied Down Payment Requirements?
- Does the depreciation schedule change with the Adjusted Cost Basis?
- sfh with a pool for a rental... been struggling on the best course of action.
- Allowable usages under power lines on public utility easement
- Reasons to give bank for cash out refi?
- First time REI Purchase looking for advice. Section 8 in Baltimore MD
| Not how I planned it, but I’m a real estate investor I think... Posted: 16 Jan 2021 12:47 PM PST My Grandfather passed away and I had the opportunity to buy his house that is bigger than what we live in right now. I'm going to keep the house we are in now as a rental. I have a renter lined up and will cash flow ~$300 a month. It isn't how I planned on getting into the game by any means but I think that's how life works. Taking advantage of the opportunity. Plan to live in new house for a few years, save more and then buy our "forever" home and hold onto this new one. I'm thankful for this sub because otherwise I would not have thought to do this. [link] [comments] |
| Rental property vs Mutual Funds Posted: 16 Jan 2021 05:52 AM PST Been lurking a bit in this sub and r/fire wondering where I should invest $20-25k in a fund, or if I am just missing an opportunity in real estate. Spouse and I, in the US, currently own a duplex outright with rents totaling 1200/month before expenses, single family home with 20 years left on mortgage renting for 1200/mo, townhouse with 18 years left on mortgage renting for $800/mo (should be $1600/mo but tenant is Covid impacted), and another empty townhouse costing $400/mo that I won't make available until after Covid rules stop applying. Our first two homes were lived in, not investments, that we kept to rent out when we bought a next home. The duplex was our first investment. It took about 10 years for us to start making any money on it as repair costs ate profits and that is how long it took for us to be able to raise rents. Our next investment was the empty townhome, bad timing and location for the pandemic. Should I expect to not make money for 10 years again if we put our money down on a new RE investment? What am I missing on how to see returns right away? I know interest rates are low, but prices seem really high. Is now still the right time? Is it better to take out equity loans and put that toward a new investment property? Or should we just drop our spare savings into a mutual fund? Markets: South Florida, Greater Charlotte, NC, and Columbia, SC. [link] [comments] |
| Posted: 16 Jan 2021 06:40 PM PST Question: 3 years ago, I bought my first investment property with some spare cash I had. I put down 20%, got a tenant in it, covered my expenses with the rent cash flow, and watched as the home value grew. I've begun the process of refinancing the house to pull out some equity and put it down on a second property. But now, I feel stuck. I can't turn around and refinance the house I just refinanced, nor refinance the house I just bought, so do I just have to wait a few years from my equity to grow (or fall!) again? Is there a faster way to jump to a third property? Another way I'm not thinking of? Thanks, [link] [comments] |
| Confused on how to execute strategy.. Posted: 16 Jan 2021 10:07 PM PST New investor, have been reading & learning a lot. I live on a HCOL area so instead of housing hacking, I think an OOS rental (looking at SFH - seems they usually have better cash flow & condos - less worries about capex + can be more attractive to renters). And from there it seems fairly simple.. there will never be a perfect deal so shouldn't you pull the trigger on the first "good" deal, meaning it meets your Criteria and the numbers make sense? It's easy enough to look at properties online, pop them into DealCheck to see if they cash flow (and maybe other criteria) and then look at if that area is up and coming or on the decline. But, obviously you can do much more - look at schools, crime rate, commute to different companies in the area, etc. But, how much due diligence is too much and how much is too little? I feel that you can spend weeks looking at all the aspects of a property and end up missing the opportunity completely. [link] [comments] |
| Posted: 16 Jan 2021 07:22 PM PST Is there a good way to determine this for a neighborhood and how often do you take it into consideration? I use the truila app that tells me the people stats. My realtor thinks we could get 1300-1400 for rents but the median income based on truila is 40k. That's only 3,333 per month so 1300-1400 is more than 3x income that most places require for rents. Should we lower our target to 1100? What's a good move to make here. P.S. We have seen comps for 1300-1400 but I think the majority was section 8 not sure [link] [comments] |
| Did I include the numbers correctly? Thanks. Posted: 16 Jan 2021 04:20 PM PST Did I do this right? Example: $800K purchase price 3.5% Down (I will put $30K Down) FHA Multi Family Loan 3.5% APR If the property I purchase has 4 units at a rental rate of $1,350.00 per unit at the time of purchase let's say the rent stays the same for the first year. Mortgate payment is $4,713.81. Gross rent is $5,400.00 NO managemnt fees. Self managed. Income after debt service: $686.19 Per Month Now factor in monthly expenses: Water: $75 per unit (Over estimating here) Garbage: $100 per month Maintenance: 7% of gross rent = $378.00 Taxes 0.90% Property Value ($600.00 per month) Insurance: $200.00 Per Month Net Operating Income = $ -891.81 Per Month or -10,701.72 Per Year Thanks In advance! I'm in the king county Washington area banking on appreciation as rates around here are anywhere from 6% to 7% appreciation. I will be sacrificing cash flow for a while. [link] [comments] |
| Primary Residence to Rental Property Strategy Posted: 16 Jan 2021 08:20 PM PST I work for a top 10 mortgage company and get discounted rates on primary residence purchase. I'm planning on purchasing a home in the next few months, living there for a year, and then turning it into a rental. Because of the discounted rates I get from my company, I'm considering doing this a few times over the course of 3 years. The main disadvantage is moving for 2-3years in a row. However, because of the rate benefits, I think it would be worth it. Has anyone done this before or can think of major issues? Thanks! [link] [comments] |
| Posted: 16 Jan 2021 11:48 PM PST One of my friends recommended this book to me called Wealth Opportunities in Commercial Real Estate. Does anyone know if it's a good book? I was also recommended for the Real estate game. Is either of these books good to start with? [link] [comments] |
| How can I assess my potential cash flow on this duplex? Posted: 16 Jan 2021 10:43 PM PST Live in Idaho, duplex is $400k, rents for 750 & 950 (but that's low for here so I could bump say $100, to $1800). Lender said with a 3.5% down FHA loan my "total payment" will be about $2230 a month, and I'll budget 1% a year in a reserve for maintenance so let's say $2560 a month. I have a $760 shortfall between my total expenses versus rent, and that's before taxing the rental income. Do my question is, what else do I need to consider and is this just never gonna cash flow? Thank you [link] [comments] |
| Posted: 16 Jan 2021 10:43 PM PST My business partner and I just purchased a property all cash to flip through an LLC (the LLC is on the deed). When we are finished renovating it, is it possible for our LLC to sell to my business partner? The goal is to sell it for a profit, then have my business partner take out a mortgage, rent it out for more than the monthly mortgage, and let the rent pay off the mortgage. Once the mortgage is paid off, it'll just be passive income. [link] [comments] |
| Buying property partly with self-managed IRA Posted: 16 Jan 2021 05:27 PM PST Hey all, if I were to buy a rental property partly with savings and partly with a self-managed IRA, can I then buyout my self-managed IRA from its share using distributions from the property? Could I buyout the self-managed IRA for any price? [link] [comments] |
| Posted: 16 Jan 2021 09:11 PM PST New investor. "Pulse check" Hi everyone. My husband inherited a house worth "500k Zillow dollars". I know it's not 100% accurate but for frame of reference. 3bd/1ba in Southern California and it's an older house, decent neighborhood. We are still going thru the process of identifying if we want to manage it or have a PM do it and all that. The good thing is this place is Loooong paid off. So this home provides us a good amount of equity to begin investment and all that stuff. I want us to buy another house, or at least a sizable down payment, on a beach house in Florida. So, we'd have: Our home is still on a 30 year mortgage The inherited home as cash flow A third property (beach house/condo) who's down payment is subsidies by the inherited home. Maybe a HELOC?. From this high level view, Am I missing something on how we can do this? Is this smart? Is it too much risk? What are some variables that we should be considering in trying to purchase a rental property. This house/condo that we want to buy would ideally be an Airbnb somewhere in the Cocoa Beach area. For those that have done something like that what was your experience lessons learned and what do you think of that decision now looking back on it? My apologies for it being perhaps a complicated posting we're really trying to get our bearings and figure out how to do this correctly. We are very committed to this and the "homework" necessary. [link] [comments] |
| Posted: 16 Jan 2021 08:04 PM PST I don't know where to post so I'd appreciate your input: If my company matches my contributions 1-1, would it make sense to put money into my 401k and then withdraw the funds next year in order to invest it? Would this yield me any profit or loss? Please explain. [link] [comments] |
| How long does it take you on average to 'find' your next deal? Posted: 16 Jan 2021 05:50 AM PST I know this isn't a one size fits all question, but I'm curious to hear about people's experiences. So from the day you decide "Okay, I'm ready to buy an investment property" (let's say you have enough capital for DP and reno, etc), how long does it usually take you before you find the deal you want and make an offer? I'm a brand new investor, started looking back in November. I identified my criteria with my agent and literally the very next day a house came on the market that checked every block, we were both surprised and thrilled. Unfortunately we got beat out by an all cash offer, and since then I haven't had any success finding a house that matches what I'm looking for. I know 3 months isn't that long but I think my expectations were skewed by finding that first house so quickly. [link] [comments] |
| Posted: 16 Jan 2021 07:32 PM PST I'm looking to get a line of credit on my primary residence to use as a down payment on a rental. Worth 1.1m owe about 730k. The highest LTV percentages I've seen are 75%. Has anyone seen a bank or credit union doing 80% or higher? [link] [comments] |
| Capital gains tax on accumulated depreciation Posted: 16 Jan 2021 07:15 PM PST What are some ways to lower capital gains tax when you have taken many years of depreciation? I was shocked to learn of the 25% tax I have to pay which is hugely increased by the accumulated depreciation. I'm ready to go on long/frequent vacations and do not want to be bothered with tenants any more. So, no 1031 for me. How about converting the rental to a primary residence? Does anyone have experience to share? What should one watch out for? [link] [comments] |
| $400k Rental Property - $3k-$3.2 Rent - Worth it?? Or Pass? Posted: 16 Jan 2021 07:27 AM PST I'm thinking about getting a cash refi to purchase an investment property. I'm on the fence and not sure if I should with values but the 1% rule in Atlanta is not happening anytime soon. Take a look at the numbers and let me know if it makes sense to do so. Are there other considerations that I'm missing? Property to Refi Value: $275k Loan Remaining: $114k Mortgage (incl. Escrow): $1200 Rent: $1675 Cash Out Amount: $65k Monthly Payment Increase after Refi: $75 increase Property to Purchase Price: 405k - Value in area will most likely increase Down: 20% HOA: 225 (landscape, roof, pool, gym, water, trash) Mortgage with Escrow: $1900-2000 Rent Potential: $2800-3100 and should continue to increase [link] [comments] |
| Change in Owner-Occupied Down Payment Requirements? Posted: 16 Jan 2021 01:45 PM PST Hey guys, I talked to Rocket Mortgage recently about buying a primary residence with 2-4 units, since I'm looking to house-hack. While they pre-qualified me pretty quickly, some of the things the representative said were surprising.
I thought that this was probably because Rocket Mortgage is a big national bank, so their choice of loan products is pretty limited, but I thought FHA was pretty specific and strict on its rules. So if she's saying FHA changed the rules, then this would be the case everywhere, if I understand correctly. I talked to a local bank before, and they offered me an FHA 3.5% down loan on a fourplex, and they also allowed me to use the property's income to offset my DTI. I'm just confused by this experience, since I thought I could technically get the same FHA product from all the banks since the FHA is the one setting the mold I would have to fit in to qualify. Has anyone else experienced something like this recently? Could anyone explain why these two banks are telling me different stories about what FHA offers? Thanks in advance! [link] [comments] |
| Does the depreciation schedule change with the Adjusted Cost Basis? Posted: 16 Jan 2021 11:10 AM PST I have converted a primary residence into a rental property. I have learned that at the time of the conversion, I need to use the lesser of the Adjusted Cost Basis or the Fair Market Value. The Adjusted Cost Basis is the lesser of the two in my situation. I also understand that in order to determine how much I can depreciate, I need to subtract the land value from the Adjusted Cost Basis. I have done all of the above and I have a generated a depreciation schedule. My question is, does the depreciation schedule stay the same once it's created? Example: If I use 300k as the amount that I can depreciate and depreciate 65k over the course of 6 years that brings my depreciable basis to 235k. If I finish the basement that year at a cost of 30K, does that change my depreciation schedule or does that just get added to my Adjusted Cost Basis for when I sell? [link] [comments] |
| sfh with a pool for a rental... been struggling on the best course of action. Posted: 16 Jan 2021 04:12 AM PST In so cal, having a pool is just lovely. That is, if you're the homeowner and take good care of eveything. But how do tenants treat and view the pool? They sure as hell wont care for everything as much, so I'll get definitely get it serviced. But theres also the maintenance of supplies, equipment and including the extra power/water costs right? And ya, the big thing about liability is keeping me up at night. Can we just be very cautious on who we accept as tenants (ones without really young kids) and get way with a low risk situation? I really dont want to have it filled because we may move back here one day, but it seems like it's just too risky to keep. What are your thoughts on this? Anyone have experience on this? [link] [comments] |
| Allowable usages under power lines on public utility easement Posted: 16 Jan 2021 12:20 PM PST Hi guys, I'm looking at a parcel that has a utility easement on it. It's a string of power lines owned by eversource the common public electric utility here. The parcel is commercially zoned and I'm thinking of starting a small business on it, but want to get a feel for other peoples personal experiences and situations like this. How much of that space do you think I could use if any? Do I need to completely avoid the area? Could I/should I use that for the parking necessary for my business? Also wondering who is responsible for storm damage to the utility lines caused by trees that I would obviously own? Any relevant experience you might be able to share is greatly appreciated. Thank you guys! [link] [comments] |
| Reasons to give bank for cash out refi? Posted: 16 Jan 2021 11:59 AM PST Curious about how the bank would react if you tell them you want to do a cash out refi on a rental property in order to buy more rental property.. especially given the current circumstances with lending. Is it safer to say it's for something like improvements? Or to just not explain? A line of credit is easier to explain, but I'm down to the last 2 places on my long list of banks to call for who will do a HELOC on an investment property. Things have changed a lot since the pandemic started. [link] [comments] |
| First time REI Purchase looking for advice. Section 8 in Baltimore MD Posted: 16 Jan 2021 02:10 PM PST Apologies up front for the long post. My wife and I have about $30k saved up and are finally ready to start shopping for our first REI, but I'm starting to get cold feet and don't know if I can pull it off. We want to buy and hold, create cashflow, have a property manager do the work managing the property. We are not in a position to be hands on. We are very risk averse and want to hold as little debt as possible. So we want to start small. Get one under our belt, get it completely paid off prior to purchasing the second property. So we have been leaning towards Section 8 or even Mobile homes. When we first starting looking into this, we lived in Baltimore Maryland. That is the market we became familiar with, and always had a plan to purchase a row home in the inner city. We now live in Saint Petersburg Florida and the market is completely different. There are no row homes. Section 8 houses are just a little smaller than my house and they still cost $200k. This is pushing us to look back into Baltimore. I do not feel good about being far away, but I do have a brother still in the area, and one of my best buddies is a home inspector and in that area. My first question is are my number expectations realistic. We want to be all in for $60. $50k purchase $5k small repairs $5k closing cost. We would get an unsecured loan for the other $30k and pay it off in 2 years cashing flowing the payment from my income. We have no other debt except our primary residence. Monthly Rent about $750-$800 a month. $80 goes to the property manager. $90 Taxes. $100 on Insurance. $100 for any misc monthly repairs that come up and start saving for larger repairs. The rest goes back towards the house. After the loan is paid back, it becomes cashflow. My second question is really just asking for advice and resources in section 8 and Baltimore. One thing I'm missing is a decent checklist of things to look out for and check for when looking at properties. Also a decent spreadsheet to compare properties. I found a lot of spreadsheets online but they all seem to be locked for editing and linked to some guru's get rich package. Any Advice is appreciated. [link] [comments] |
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